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Credit card companies don’t alway make it easy, but there are ways to pay your credit card bill with your debit card. To use your debit card to pay a credit card bill, you must do so via bank transfer payment. In other words, you have to use either a credit card provider’s payment portal or a third-party payment portal that includes not only your debit card information, but also your banking information.

Keep in mind, however, that credit card companies usually prefer to receive payment funds from the customer’s bank account over a physical debit card. Many credit card providers simply don’t accept monthly bill payments with physical debit cards, but they will allow debit card payments if you play by their rules. That may change the way you use a debit card to pay a credit card bill, but it doesn’t mean you can’t do it.

Can You Pay a Credit Card With a Debit Card?

You might be able to pay a credit card with a debit card. Whether you can do so really depends on the credit card provider’s policy on debit card payments — some credit card policies allow for them, and others don’t.

Consequently, you may have to go out of your way to get the job done. When you go to pay your credit card bill, there likely won’t be an option to enter a card number as a method of payment, whether that card is a credit card or a debit card. In most cases, however, you can pay your credit card bill with the bank account that the debit card is attached to by making an electronic transfer.

Recommended: Tips for Using a Credit Card Responsibly

How to Make a Credit Card Bill Payment (Indirectly) With a Debit Card

Even if you can’t use a debit card to directly pay a credit card bill, you can indirectly use a debit card — or rather the funds attached to that debit card — to pay your outstanding credit card debt. Here’s how:

1.    Review your checking account, and get the bank routing number and checking account number. Do so privately and securely, so as not to attract financial fraudsters.

2.    Go to your credit card account to set up automatic payment. A handy feature of how credit cards work, this will allow money to be withdrawn from your bank account ahead of the monthly payment due date. On that date, the credit card company will withdraw the specified cash amount from your bank account.

3.    Make sure you have enough cash in your bank account to cover the withdrawal. If you don’t, your credit card company will reject the payment. It’s up to you to reach out and make good on your monthly credit card payment that’s due. Any delay in doing so could result in a missed or late payment, which could have financial consequences.

Recommended: When Are Credit Card Payments Due?

Paying a Credit Card Bill With a Debit Card Online

If you’re using a debit card to pay a credit card bill online, you’ll probably need to make that payment through the credit card’s payment portal. The good news is that credit card companies may accommodate online debit card payments.

Once you’ve signed into your credit card account, you’ll be given several options to pay your bill. The most common methods include ACH bank payment, a third-party payment platform, over the phone, or with your debit card.

Simply click on the debit card payment option and fill in your card details (this should only be a one-time occurrence as your debit card information should be securely held by your credit card provider in its payment portal.)

Once your debit card information is accurately entered, review the payment and hit “send.” Your payment should be confirmed immediately by the card carrier, and the money will leave your debit card account within 24 hours or so.

Paying a Credit Card Bill With a Debit Card Offline

Credit card companies likely allow you to use your debit card to make a credit card payment by phone, in person, and sometimes through the sponsoring bank’s ATM.

Make sure you have your debit card on you before paying at any bank or over the phone. If even one digit is wrong, the payment won’t go through, and you’ll have to revert to another form of payment to cover your credit card debt.

Are There Any Downsides to Paying Your Credit Card Bill With a Debit Card?

The fact is, while credit card companies will accept debit card bill payments, it’s not their preferred form of payment. It’s easier for credit card carriers to process bank ACH payments or third-party payments through platforms like PayPal, which handle the process for the card company. As such, you’ll have to jump through hoops or go an indirect route, similar to if you were to try to pay a credit card statement with another credit card.

Further, debit card payments may be prone to various outcomes that credit card companies don’t like. This includes scenarios such as the cardholder not having enough money in their account to cover the credit card payment or the fact that debit cards are common targets of financial fraudsters. In fact, a key difference between a credit card and debit card is their levels of payment protection.

The Takeaway

Just because you can use a debit card, even in limited fashion, to pay your credit card bill doesn’t mean you should. To keep payments flowing smoothly and to protect your debit card (and your bank account), it’s likely a better move to pay your credit card bills via bank ACH transactions or through secure third-party payment processors. That way, your payment still originates from your bank checking account — only without the potential payment and security headaches that may come with using a debit card to pay a credit card bill.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can I pay a credit card online with a debit card?

Technically, yes, you can pay your credit card bill with your debit card. However, it may take some extra steps to do so.

Can I pay my credit card at an ATM with a debit card?

Yes, you can typically use a debit card at an ATM to pay a credit card bill — but only an ATM from the bank that offers the credit card.

Are there extra charges for paying a credit card with a debit card?

You generally won’t face any extra charges for paying a credit card with a debit card. You may simply have to jump through some extra hoops to do so.

Can I pay my credit card bill with someone else’s debit card?

While this is technically doable, it’s not advisable. Using another party’s debit card to pay a credit card bill can get complicated, especially if you’re not certain the other person’s bank account has sufficient funds to cover your balance.

Photo credit: iStock/insta_photos

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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A price protection credit card benefit offers a limited lowest price guarantee on your purchases. If an item you purchased is advertised at a lower price than you paid, then you might be eligible for a refund of the difference if you paid using a credit card with price protection.

Although the idea seems straightforward, price protection credit card clauses aren’t as simple due to differences between card programs. Here’s a closer look at what price protection is and how it works.

What Is Credit Card Price Protection?

Credit card price protection is a card benefit that some programs offer their cardholders. It guarantees that if an eligible item you purchased using your credit card is advertised at a lower price, the card issuer will refund you the price difference.

To receive the funds, you’ll have to file a claim asking to be refunded — it won’t automatically get deducted from your credit card balance. It’s also up to the cardholder to be on the lookout for price fluctuations.

Recommended: When Are Credit Card Payments Due?

How to Use Price Protection

Credit cards with price protection are most advantageous when used toward a purchase that commonly changes in price. For example, this could include electronics, clothing, and other items that often go on sale.

There are also a few things to keep in mind when it comes to how credit cards work with price protection. For starters, to use price protection, the lower-priced item must be the exact specifications of your original purchase. This includes the product manufacturer, model number, and year it was released.

You’ll also need to ensure that the reduced price was advertised within the program’s specified timeframe, which is usually anywhere from 30 to 90 days and occasionally longer. Plus, you’ll need to file a refund request within the allotted claim window.

Questions to Ask Issuers That Offer Credit Card Price Protection

If you’re specifically looking for a credit card with price protection, make sure you know all of the terms associated with this benefit. Contact the card issuer upfront to get clarity about the eligibility requirements for filing a price protection claim.

What Items Are Eligible for Price Protection?

The range of items that are eligible for price protection under your card’s benefit program can be quite broad. For example, home goods, furniture, clothing, footwear, kitchenware, bedroom linen sets, pet accessories, and more might qualify under your price protection credit card.

What Items Are Not Eligible for Price Protection?

Below are some examples of goods that might be excluded from price protection, depending on your benefits program:

•   Animals

•   Antiques

•   Bespoke or one-of-a-kind items

•   Cash-only purchases

•   Collector items

•   Food and beverages

•   Discontinued items

•   Jewelry

•   Limited edition items

•   Live plants

•   Original artwork

•   Perishable goods

•   Tickets

•   Services and related costs

•   Vehicles

•   Watches

Further, items purchased at liquidation sales, storewide sales, or online might not be eligible for price protection. Also note that price protection isn’t the route you take if you’re simply unsatisfied with the service or product you received. In that scenario, you’d request a credit card chargeback.

Recommended: What Is a Charge Card?

Guide to Filing for a Credit Card Refund

If the advertisement you’ve found shows a lower price than what you paid for your original purchase, and your situation fits your credit card price protection requirements, you can submit a claim for reimbursement. To do so, you’ll generally need to go through the following steps:

1.    Save the lower-priced advertisement. Retain the original physical ad that shows the product’s name, merchant or retailer, price, and date, if applicable.

2.    Find your original receipt. The purchase receipt for the item you bought should include the merchant’s name, date of purchase, item, and price. It should also show that you used the credit card with price protection. You might also be asked to supply a copy of your statement that has the original purchase on it.

3.    Submit a claim. Contact your card’s Benefits Administrator, or call the number at the back of your card to file a claim for a price protection refund. Make sure that your claim is submitted within the eligible claim period.

4.    Review your balance. Check your credit card balance or statement to confirm that the refunded amount is correctly reflected on your account.

How long a credit card refund takes depends on your card issuer and its processing timeline. Generally, it can take five to 14 business days to see a refund posted to your account’s balance.

How Long Do You Have to File for a Credit Card Refund?

The timeline you have to claim a credit card refund under price protection varies between credit card programs. Some cards allow you to file claims up to 90 days after your purchase date, while others may give you longer.

Additionally, some benefits programs require that the advertisement date is within a certain number of days of your original date of purchase. Make sure to confirm the ad date requirement under the credit card price protection benefit, as well as the deadline to file a formal claim.

Is There a Limit to Reimbursement Through Price Protection?

Another restriction you might encounter for cards with price protection is the minimum and maximum refund limit per item. For example, your card might impose a minimum refund threshold of $10 up to a maximum refund of $250 per item. It also might have an annual reimbursement limit, which caps the total refund amount you can receive in a year.

If you want to file a refund claim under your price protection benefits, check your credit card’s benefits guide to learn about its specific requirements.

Recommended: What Is the Average Credit Card Limit?

Tips for Saving Money Without Credit Card Price Protection

Using a credit card with price protection isn’t the only way to save money when prices are reduced. Here are some other possibilities for saving:

•   Look for same-retailer price adjustments: Some retailers offer a price adjustment if you recently purchased an item in their store, and the same item is marked down at the same store not too long afterward.

•   Find price matches. To outprice their competitors, a retailer might offer a price match or lowest price guarantee. If you find the exact item elsewhere at a lower price, it will offer to match the price or offer a credit card refund for the difference if you’ve already purchased the item at their store.

•   Catch items on sale. Track upcoming sales, like a retailer’s annual sale or holiday sale, that offers a large discount off of the retail price. If shopping online, using an online price-tracking tool can help you find the lowest price.

•   Keep an eye on your credit card statements. While not necessarily a guaranteed path to savings, regularly reviewing your credit card statement can help you catch any charges that aren’t right, whether due to fraud or getting charged incorrectly. In those instances, you could dispute a credit card charge to attempt to get your money back.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

A price protection credit card offers peace of mind when purchasing goods that might fluctuate in price. It can allow you to claim a partial refund if there is a published price drop within a period of time after you make your purchase with your card and within the plan’s guidelines. Aside from applying to tangible goods, you may be able to take advantage of price guarantees for travel-related purchases like hotel rates, which can change daily.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is price protection on a credit card?

Price protection allows cardholders to claim a credit card refund on a price difference if a lower published price becomes available. Typically, price protection is available for a limited period after the original purchase was made.

Do all credit cards offer price protection?

No, not all credit cards offer price protection. Card benefits, like price protection, vary across card issuers and credit card programs. See your card agreement to learn more about your card’s benefits and terms.

How can I use price protection?

In order to take advantage of price protection, you’ll first have to make a purchase using a credit card with price protection. Then, within the permitted time period, find the same product marked at a lower price and following the stipulations of your plan. From there, you’d contact your card issuer to submit a claim for a refund in the amount of the difference between the two prices.

What is a price protection clause?

A price protection clause is the written parameters of your card’s price protection benefit. It states the issuer’s criteria for claiming the benefit, including the allowable time frame for a price protection request, eligible purchase categories, and more.

Photo credit: iStock/jroballo

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What unlimited cash-back means is you can earn uncapped rewards using the card — in other words, your earning potential isn’t limited to a certain amount. While this might sound too good to pass up, there are both pros and cons to consider to determine whether unlimited cash back is worth it for you.

What Is Cash Back?

Cash back is a type of reward that a credit card issuer may offer through its rewards credit cards. Depending on the terms, cardholders can earn a certain percentage back on qualifying purchases (cash advances typically don’t qualify). For instance, you may be able to earn 2% cash back on purchases at gas stations, or 3% back at grocery stores.

Some cards may put caps on how much cash back you can earn. As an example, a card may limit cardholders to 2% cash back for up to $5,000 in purchases in a calendar year. While cardholders may still be able to earn cash back after they’ve hit their certain earnings threshold, they may earn rewards at a lower rate thereafter.

What Is Unlimited Cash Back?

Unlimited cash back means that your credit card offers cash-back rewards with no caps or limits on how much you can earn. In most cases, you can earn cash back on all of your purchases, though some cards may only offer unlimited cash back on certain spending categories.

For most credit cards, your cash-back rewards don’t expire as long as you keep your card open. This means that if you continue racking up rewards, you may be able to redeem your accumulated cash-back rewards for a sizable statement credit or other perk.

How Unlimited Cash Back Credit Cards Work

How credit cards work that offer unlimited cash back is that they allow cardholders to earn cash back on their purchases with no earning cap. In other words, there is no limit as to how much you can earn on qualifying purchases with these types of credit cards.

As you earn these rewards, you can redeem them in several ways. This includes as a statement credit or actual cash via a check or bank transfer.

In general, you’ll need good or excellent credit (meaning a score of 670 or above) to qualify for an unlimited cash back card. That being said, there are also cash back credit cards with less stringent credit card requirements, meaning you may be able to qualify even if you have a fair credit score or limited credit history. In general, however, the higher your score, the better the rewards tend to be.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

Pros and Cons of Unlimited Cash Back

Before signing up for an unlimited cash back credit card, consider the advantages and disadvantages first.

Is Unlimited Cash Back Worth It?

Getting an unlimited cash back credit card might be worth it if you’re confident you can maximize its rewards. For instance, if you continually make purchases in higher rewards categories, you can save some serious cash due to the rewards earnings. Ideally, you’d be able to earn enough rewards to entirely offset the annual fee, if your card has one.

An unlimited cash back card may not be a great fit if you continually carry a balance on your credit card, given what a credit card is and how you’ll accrue interest. Your interest rate will likely be higher than the cash back rate you’ll earn, which means carrying a balance could cancel out rewards earnings.

Another reason to think twice about an unlimited cash back card is if you’re a frequent traveler. A travel rewards program may be a better choice since you can earn free flights, hotel rooms, and even cash back. Plus, you might earn more lucrative rewards on travel-related spending than a cash back card would offer.

Recommended: How to Avoid Interest On A Credit Card

Categories of Unlimited Cash Back Credit Cards You Can Choose From

There are several ways credit cards give you cash back, including flat rate and through different spending categories.

Flat Rate

Flat-rate rewards allow you to earn the same cash-back rate across all purchases made using a credit card. For instance, you might earn 3% cash back on all purchases made with the card. Some may issue you a certain percentage cash back when you make a purchase, and then another amount you pay off your credit card bill. Regardless, your specific spending category won’t matter for earning with a flat-rate rewards card.

Rotating Categories

Your credit card may offer several spending categories each quarter that you can select from to earn cash back. For instance, you might be able to choose to get 5% cash back on purchases at gas stations or office supply stores for the first quarter. After the quarter is over, you can choose a different spending category.

While rotating categories can allow you to maximize your rewards-earning potential, this setup does require some strategizing. You’ll need to stay on top of choosing a new category each quarter. Plus, you’ll then have to make sure you adequately take advantage of spending within that category.

Fixed Spending Categories

Instead of choosing different categories every quarter, some credit cards offer fixed cash-back earnings for various spending categories. For instance, a card may allow you to earn 3% cash back for purchases at grocery stores, and 1% cash back on all other purchases.

While fixed spending categories require much less planning ahead for, you will want to ensure the card you sign up for credit card rewards you in a category you regularly spend in. Otherwise, you could end up forgoing valuable rewards.

Maximizing Unlimited Cash Back Earnings

If you want to make the most of earning unlimited cash back, here are some general credit card rules to keep in mind:

Select the Right Card

It’s a good idea to do your research and find a card that matches your spending habits. For example, if you use your credit card a lot at gas stations, it might not be the best choice to sign up for a card that doesn’t offer cash back rewards for this category.

Time Your Spending

If you sign up for a credit card with a sign up bonus, consider timing your card opening with a major purchase you’d been planning. Doing so will help ensure that you meet the minimum spend requirements in order to earn the bonus.

Or, if your credit card is about to have extra earnings for a rotating category, you might think about waiting until that time to make a planned purchase.

Note Spending Categories

After signing up for a card, pay attention to how much cash back you’ll earn in different categories if it’s not a flat rate card. That way, you can be sure to use that card exclusively for certain spending categories, or make sure you sign up for rotating categories well within the deadline.

Review Credit Card Terms

Looking over your credit card terms can help to ensure that you know what does and doesn’t count toward earnings. You might also discover through your card’s terms that you can earn enhanced rewards by taking certain actions, such as holding a certain amount of money in an associated bank account.

The Takeaway

A cash-back credit card is a great way to earn rewards that doesn’t necessarily require a complicated redemption process. Even better is when the card doesn’t place limits on the amount of cash-back rewards you can earn, which is the meaning of unlimited cash back.

Still, you’ll need to make sure you avoid carrying a balance and take steps to maximize your rewards to ensure you don’t negate your cash-back rewards earnings.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How does unlimited cash back work?

If you have a credit card with unlimited cash back, that means there are no limits on the amount of rewards you can earn through qualifying purchases.

Is unlimited cash back better than points?

Whether cash back or points is better really depends on your preferences. Cash back is straightforward to track and redeem. Meanwhile, points may translate to a greater range of redemption opportunities, including for travel-related purchases. However, the value of points can vary depending on the card and the way the points are redeemed.

Photo credit: iStock/AsiaVision

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Private label credit cards are a particular kind of credit card that’s typically only good at one specific store. Some stores or other merchants offer private label credit cards to give better terms to certain customers than they might otherwise be able to offer. Many merchants also provide these cards as an incentive for customers to spend more, since they can potentially defer payment and/or earn loyalty rewards.

These perks are among the reasons why private label credit cards are popular. But before you start thinking about how to get a private label credit card, it’s important to consider their pros and cons.

What Is a Private Label Credit Card?

Also called a store credit card or a closed loop credit card, a private label credit card is a credit card that can only be used at one particular store or merchant.

Generally, a merchant’s private label credit card is partnered with and issued by a third-party financial institution, such as a bank. These institutions act as private label credit card issuers, and they’re responsible for funding the credit line and collecting all payments.

Recommended: Tips for Using a Credit Card Responsibly

How Do Private Label Credit Cards Work?

If you understand how credit cards work, you’ll know they usually can be used anywhere the processor (often Visa or Mastercard) is accepted. In contrast, private label cards are intended for use only at the store or merchant where they are issued.

In other respects, private label cards work in much the same way as traditional credit cards. These cards offer a revolving line of credit that cardholders can borrow against, up to their predetermined credit limit. It’s necessary to make at least a minimum credit card payment to avoid a late payment fee. Balances that carry over from month to month will accrue interest.

Recommended: What is the Average Credit Card Limit?

Getting a Private Label Credit Card

In most cases, the easiest way to get a private label credit card is to apply at the store that’s issuing or sponsoring the private label credit card. Many stores offer incentives for applying for their private label card while you’re shopping in the store. You also may be able to sign up for a private label card on the store’s website.

But even if you can get one, should you get a private label credit card? Choosing a credit card depends on your specific financial situation. However, if you have sufficient income and strong credit, you may be able to get a traditional credit card that may offer rewards and more flexibility than a private label card that’s only good at one store may provide.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

How to Set up a Private Label Credit Card

Because banks or other financial services companies serve as the credit card issuers for most private label credit cards, you’ll likely be familiar with the setup process if you’ve ever had any other credit card.

Once you’ve applied for and been approved for a private label credit card — assuming you met the credit card requirements — you’ll typically go through the process of setting up your card. You’ll want to make sure to log in to your online account, review your statements, and set up payments.

Next, you’ll want to make sure to log in to your online account, review your statements, and understand when your credit card payments are due.

Benefits of Private Label Credit Cards

Wondering why are private label credit cards popular? Here are some of the upsides of these types of credit cards:

•   Easier to qualify for: Private label credit cards are often thought of as being easier to get approved for than general purpose credit cards. So if you don’t have an excellent credit history, you may consider a private label credit card as a way to help build your credit.

•   Earn rewards and other benefits: Another benefit of private label credit cards is that stores often use them to build loyalty with their best customers. This might include offering rewards, loyalty points, or even nixing the credit card annual fee some cards have.

Drawbacks of Private Label Credit Cards

Even if the pros of private label credit cards may seem enticing, it’s also important to account for the downsides. These include:

•   Lack of flexibility in use: The biggest drawback of a private label credit card is that it typically can only be used at one specific store or merchant. The lack of flexibility means that it is difficult for a private label credit card to be your only or main credit card.

•   Potentially higher APRs: Another potential drawback is that many private label cards have annual percentage rates, or APRs. Make sure you read the terms and conditions before signing up for a private label credit card to ensure you know the consequences of carrying a balance. Otherwise, you could end paying exorbitant interest — which is how credit card companies make money.

Recommended: How to Avoid Interest On a Credit Card

Private Label vs General Purpose Credit Cards

As you can see, slightly different credit card rules apply to private label credit cards. Here are the major differences to keep in mind when comparing a private label card to a general purpose credit card:

Private Label vs Co-Branded Credit Cards

Some merchants offer a co-branded credit card that offers specific perks for their particular store but is issued by a major credit card processor (i.e., Visa or Mastercard). This means that you can also use the co-branded credit card at other merchants. As one example, Old Navy and Barclays offer the Navyist Rewards Mastercard, which offers Old Navy perks but can also be used anywhere that Mastercard is accepted.

Here’s a breakdown of the key differences to keep in mind to distinguish between private label credit cards and co-branded credit cards:

Alternatives to Private Label Credit Cards

Two alternatives to private label credit cards are general purpose credit cards and co-branded credit cards. Here’s what you need to know about each of those other options as you’re deciding which type of card is right for you:

•   General purpose credit cards are what you probably think of when you think of a credit card. These cards can be used anywhere that processing network, such as Visa or Mastercard, is accepted.

•   Co-branded credit cards are cards that share branding between a bank or credit card issuer and another merchant or company. Examples include airline or hotel credit cards or the credit cards of some retail stores. With a co-branded credit card, you can also use the card anywhere the processing network is accepted, and you’ll often earn brand-specific perks on every purchase.

Recommended: What Is a Charge Card?

The Takeaway

A private label credit card is a type of credit card that can typically only be used at one particular store or merchant. Many merchants use private label cards as a way to incentivize and reward their most loyal shoppers. It can also motivate shoppers to spend more, since they have the convenience of a credit card and can defer payments to a later date.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How can I get a private label credit card?

The easiest way to get a private label credit card is to apply on the website or in the store of the merchant that offers the card. If you meet the credit card requirements, you will be approved for the card. Then you can start using it while shopping at this particular merchant.

How do private label credit cards make money?

Private label credit cards make money in much the same way that any other credit card companies make money. They make money from the fees associated with the card (late fees, possible annual fees, etc.) and interest paid by cardholders who carry a balance. Additionally, they may rake in money from “swipe fees” paid by the merchant each time the card is used.

Who do you make payments to when using a private label credit card?

While a private label credit card often has the logo of a particular merchant or store, the day-to-day processing is handled by a bank or other financial services company. You’ll make your payments directly to the processing company, usually not to the store itself. One of the credit card rules for successfully managing your credit is to pay your bill in full, each and every month, so make sure you understand who and when you need to pay.

Photo credit: iStock/gazanfer

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Defensive driving courses aren’t just for motorists hoping to shave points off their driving record. For some people — especially teens and seniors — taking a defensive driving class can earn them discounts on their car insurance premiums.

But what is defensive driving? In this guide, we’ll look at what these courses have to offer, who might benefit from them, and what kind of insurance discounts may be available to course participants.

What Is a Defensive Driving Course?

It isn’t the same thing as driver’s ed. In defensive driving, drivers learn strategies specifically designed to keep them safer on the road.

Experienced drivers can think of it as a refresher course or a tune-up of the skills they already have. They may even learn that some traffic laws are different from when they first got their license. New drivers, meanwhile, can pick up strategies that reinforce and improve on what they recently learned, with a focus on staying alert to potential hazards.

Drivers often take a defensive driving course (sometimes referred to as “traffic school”) to remove violation points from their driving record and keep their insurance costs from going up. Other drivers may be able to use a defensive driving course to lower their car insurance costs.

These days, anything that offsets high gas prices and car maintenance costs is welcome.

Recommended: How to Get Car Insurance

Who Is Eligible for a Defensive Driver Training Discount?

Eligibility requirements for a defensive driver training discount vary from one insurance company to the next, and from state to state. Insurers may limit discounts to older drivers (starting at age 50 or 55), but some make discounts available to drivers younger than 25.

Many people sit down for a personal insurance planning session once a year. That’s a great time to ask your insurance agent if there’s a defensive driver discount you might qualify for. Or check the list of available discounts on your insurer’s website.

An insurer may want you to take a particular driving course that it has pre-approved. If you’re looking for a discount, be sure you’re familiar with all the requirements before signing up for a class. As anyone familiar with how car insurance works can tell you, it pays to read the fine print.

Recommended: Auto Insurance Terms, Explained

Defensive Driving Insurance Discount Exclusions

Don’t count on getting a discount if you’re taking a court-ordered defensive driving course or hope to have points removed from your driving record. Taking a defensive driving class can help keep your premiums from increasing (and/or lower your fine) if you got a ticket, but you probably won’t see an additional reduction.

Your age can also exclude you from receiving a discount. Some states require insurers to offer discounts to older drivers who take a course. But if it isn’t state-mandated, a company may not offer this discount to any of its customers, regardless of age or driving experience.

How Much Can You Save with a Defensive Driving Insurance Discount?

Defensive driving discounts can vary depending on the state you’re in and the insurance company you choose. But generally, if an insurer offers a discount, it’s between 5% and 20%, and typically lasts three to five years.

How Can You Renew a Defensive Driving Insurance Discount?

Be sure to find out how long your discount will stay in effect and mark that anniversary on your calendar. You’ll have to take another defensive driving course before that time is up, or you may lose your discount and your premiums could increase.

What Happens in a Defensive Driver Training Class?

Defensive driving is generally defined as using skills that can help minimize risk and avert car accidents. The focus in a defensive driving course is your safety — and that of your passengers and the people (and critters) on the roads you travel.

State course requirements vary, but you can expect the class to last about six to 10 hours and cover topics like speeding, common distractions, anger management, reaction times, driving under the influence, crash prevention, passing and parking techniques, and your state’s traffic laws.

And yes, there will be a test. It might be a comprehensive final exam or quizzes on each separate unit, but you’ll have to pass to complete the course.

Online vs In-person Driver Training Classes

Defensive driver courses are available in-person or online, so you can choose the style that suits you best. Some states and insurance companies require you to take a specific pre-approved class to get a discount (or have points removed), so if that’s your goal, make sure you’re meeting those requirements.

Beyond that, it’s really a matter of preference. There are pros and cons to both types of classes. Taking an online course offers convenience and flexibility: You can take the class whenever it works for your schedule. And an online course may be less expensive. But with an in-person class you may be able to engage with the instructor and your classmates in a way that makes the information more meaningful — and memorable.

Recommended: How Much Does Insurance Go Up After an Accident?

Why Take a Defensive Driving Course?

There are a few good reasons why someone might take a defensive driving course:

•   Earn an insurance discount. Even with just a 10% discount every month for three years, the savings can be significant.

•   Improve driving skills. If you’re a newbie behind the wheel, you may learn some techniques and behaviors that can help keep you safe. And if you’ve been driving for decades, you might be surprised at what you’ve forgotten — or never learned.

•   Shave points from your record. Taking a class may reduce the cost of a traffic ticket or remove points from your record. And that can keep your insurance premiums from increasing. (Each insurance company has its own method for deciding how your driving record affects your rate.)

•   Because you have to. If you’re convicted of a DUI or another serious offense, your course may be court-ordered.

Car Insurance Companies That Offer Defensive Driving Discounts

Many traditional and online insurance companies offer defensive driving discounts, but the eligibility requirements and discount amount vary by state. Here’s a look at what some insurers offer:

States that Offer Defensive Driving Discounts

Some states encourage or mandate insurance discounts for motorists who take a defensive driving course. Here’s a sampling of what’s available across the country:

California

Older drivers can qualify for reduced insurance premiums after successfully completing an approved course. California law allows insurers to determine the reduction amount. Customers with a poor driving record can be refused the discount.

Delaware

Drivers who complete a Delaware DMV-approved course are eligible to receive an insurance discount of up to 10% for three years. If they take a refresher course within 180 days of the end of that period, they may be eligible to receive a discount of up to 15% for the next three years.

Florida

Florida drivers 55 and older can qualify for a discount of up to 10% a year for three years. The state’s mandated discount applies to all insurance companies; contact your insurance agent for your discount amount and eligibility requirements.

New Jersey

New Jersey drivers who complete a defensive driving course approved by the New Jersey Motor Vehicle Commission can receive a discount that applies for up to three years. The discount does not apply to the state’s Driver Improvement Plan (DIP) or Probationary Driver Program (PDP) course.

New York

The state of New York has a mandatory three-year, 10% insurance discount for motorists who complete a defensive driving course.

Texas

Texas does not require insurers to provide a defensive driving course discount, but many insurers in the state do offer them for motorists who take a state-approved class.

Virginia

Insurance providers in Virginia must offer a discounted rate to drivers who are 55 and older who complete an approved driving course.

The Takeaway

Defensive driving courses can be a (relatively) painless way to get a discount on your auto insurance premiums of between 5% and 20%. And it could make you a better, safer driver. But before you sign up for a class, make sure it’s approved by the state and/or your insurer. Most insurance companies offer several different types of discounts to customers, so if you’re looking to lower your premiums, shop around and compare auto insurance quotes.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

FAQ

Is an advanced driving course worth it?

Defensive driving courses typically cost $25-$100. If you can get an insurance discount for taking a class, you might be able to make that back in savings in less than a year. And many defensive driving course discounts are good for two or three years after taking a class. Another plus: You’ll likely come away with some improved driving skills.

Does a defensive driving course lower insurance in California?

Yes, older drivers in California can qualify for reduced insurance premiums after successfully completing a state-approved defensive driving course.

How hard is the advanced driving test?

If you pay attention in class, your defensive driving exam (or unit quizzes) shouldn’t be too difficult. But if you’re concerned, there are practice tests available online that can give you an idea of what a test might look like.

Photo credit: iStock/ljubaphoto

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